Reserves in Sanatorium Insurance

The object of the Netherlands Foundation for Sanatorium Insurance (“N.S.V.†) is to insure the risk of treatment in a sanatorium because of tuberculosis. For insured persons admitted to a sanatorium because of tuberculosis, the N.S.V. pays the insured sum for every day of treatment. At the moment nearly 80% of the population of the Netherlands is insured directly or indirectly in the N.S.V.There are three groups of insurances: obligatory insurance, voluntary collective insurances and voluntary individual insurances. The insurances in the first and second group are, strictly speaking, reinsurances of the risk of tuberculosis of a great number of institutions concerned with cost of sickness insurance. The risk of the insurance in these two groups is only administered and pooled by the N.S.V.This paper concerns the group of the individual insurances only, which group contains about 1.250.000 insured persons. The risk of this group is run by the N.S.V. itself. As the N.S.V. is a non-profit organisation, the premium level is held as low as possible.From statistical data, derived from the administration of the N.S.V., the “admission frequency†is calculated every year, being the quotient of the number of insured persons, admitted to a sanatorium in that year, and the total number of insured persons. This admission frequency a, which is now about is used as a basis for the calculation of the premium which will be in force during the next year.